On Tuesday, the US dollar reduces the losses against the Canadian dollar, but USD sentiment remains weak before Friday's speech of the Federal Reserve chief, Janet Yellen.
USD/CAD rebounded from 1.2885, the session low, to 1.2910 in early trading in the US, still keeping down 0.29%.
The pair was likely to receive support at 1.2826, the low of August 17 and resistance at 1.2997, the high of August 12.
Market participants hope that this Friday Janet Yellen will give guidance on the timing of the next rate hike.
The dollar rose after the head of the Federal Reserve Bank of San Francisco, John Williams, indicated that he supports a rate hike in September.
The comments came after the presidents of the Federal Reserve Bank of New York and Atlanta, William Dudley and Dennis Lockhart, said that a rate increase is quite possible in September.
At the same time, the growth of the Canadian dollar is expected to be restrained, as oil prices fell Tuesday on fears that the upcoming meeting of major oil producers won’t end with the adoption of any action to reduce excess supply in the market.
Canadian dollar is higher against the euro: EUR/CAD fell 0.22% to 1.4623.
Earlier on Tuesday, Markit research firm said its index of purchasing managers in manufacturing in Germany fell in August to a two-month low of 53.6, from 53.8 in the previous month, confounding expectations for a decline to 53.5.
PMI in Germany's services sector fell to 15-month low of 53.3 this month from 54.4 in July, while there were not expected any changes.
Markit also reported that France's manufacturing PMI fell to 48.5 in August from 48.6 last month, although there was expected a growth to 48.8.
PMI in French services rose to 52.0 this month from 50.5 in July, while no changes were expected.
Eurozone’s Composite PMI (for production and services) rose to 53.3 in August from 53.2 in July, while it was expected a fall to 53.1.